As this volume of work was awarded the 2019 International Organisation of Vine and Wine (OIV) prize for the best new book in the “economy” category, I was rea- sonably confident that this would be an interesting book to review. The volume asks: What models of industrial organization are present in the main wine producing countries? Can different industrial organization characteristics be identified and described? And are the differences in approach between the old, new, and very new wine production countries really that substantial? The 28 contributed chapters are grouped into five parts: Part I is the Structure of the Wine Sectors of the World; Part II is Regulations in the Wine Sector; Part III is Diversity of Organisation in the Wine Industry; Part IV is Backwards Vertical Integration; Part V is Efficiency of the Business Models in the Different Wine Industries. Part I consists of a series of self-contained country specific chapters that provide an overview of the characteristics of the production systems used in each country. The old world is represented through chapters on France, Italy, and Spain; the new world through chapters on the United States, Australia, Argentina, and South Africa; and the very new world by a chapter on China. All of these chapters provide a treasure of facts and figures on what is grown, where it is grown, sales chan- nels, corporate structures, and the relative importance of geographical indicators (Protected Designation of Origin (PDO)). All of the chapters are interesting, and rather than being just relevant to industrial organization research, these chapters represent great country specific references. As the China market is the market I know least well, I found this material especially interesting. At the end of these chapters it is apparent that there are some structural differences between countries, for example, the relative importance of taxation issues as a factor influencing structures (more important in the new world); the role of co-operatives (more important in the old world), and differences in land availability for planting (generally unrestricted in the new world and highly restricted in the old world). Overall, however, there are many factors that are less different than one might ini- tially think. For example, although industry concentration is higher in the new world, the actual size of large firms is not that dissimilar across both new and old world countries. There also seems to be a convergence towards the use of geograph- ical identifiers across all producers, and a broad movement towards higher-quality wine production everywhere, although each country is starting from a different base. Part II first provides an overview of the activities of the OIV and the World Wine Trade Group (WWTG). Although OIV has a long European history, and the WWTG is a modern new world focused group, both organizations are shown to have complementary objectives. There are no formal links between the two organi- zations, but the reader is left with the impression that convergence in core objects is likely. The chapter on European wine policy provides an honest account of policy interventions and their results and provides an excellent historical overview. The trade chapter places wine trade within a broader context of barriers to market access and concludes with coverage of topics that are both important for wine trade and global trade more generally: the current “America first” trade policies of the United States, and the disruption to trade associated with the United Kingdom leaving the European Union. If the Part I chapters drew the reader towards the similarities across wine produc- ing countries, the Part III chapters start by refocusing the attention of the reader on the industrial organization aspects that are genuinely different between the old and new world producers. A transaction cost framework is then used to explain the dif- ferent organizational features across vineyards, wineries, and decisions, such as the extent of contracting at different wineries. This is followed by a detailed examination of co-operative strategies for growth that draws on information gathered through a series of semi-structured interviews with managers that have actually been involved in real world wine co-operative mergers. The section concludes with a detailed Bordeaux region study that highlights the complex relationships between the differ- ent actors along the supply chain. Part IV can be viewed as a set of case studies. The first case study focuses on strat- egies in Burgundy and uses cluster analysis to identify groups, and in doing so, high- lights the diverse approaches that can be used to operate profitable wine businesses. The focus of the second case study is Bordeaux, and Farm Accountancy Data Network (FADN) information is combined with data from France’s Computerised Vineyard Register (CVI) to create a detailed database for 684 farms, that include 258 co-operatives. Following a review of financial performance, the case study focuses on the vertical integration options for co-operatives. Prosecco production is the focus of the third case study, and again, analysis is supported through the creation of a detailed and comprehensive industry sector database. The case study reveals a complex industry structure, but also describes a positive story of industry sector performance. The final case study provides contrasting specific examples of approaches to integration in the old world, where planting rights constraints are present, and the new world, where such constraints do not exist. The role of land availability and land ownership structure in influencing indus- try organization is especially clear in this final case study; however, the role of land availability and land ownership structure as factors shaping industry organization is a common element to all of the case studies. The structure of chapters in Part V presents a balanced view of the relative success of different structures, for example, Brand v. PDO, and shows that there is no single, definitive dominant strategy. There are multiple examples of success, and both collec- tive and individual reputation are important features of the wine market that influence industrial organization structures. Contrasting two different successful strategies— Chile and Switzerland—serves to highlight this point. Different models coexist at the regional, national, and international levels, and both strategy and industry struc- tures are constantly evolving at each level. Part V, and the volume as a whole, con- cludes with some observations about future possible drivers of change. Overall, the volume is an excellent reference for anyone wanting to understand the industrial organization setting of the global wine industry. The volume is also, definitely, a worthy winner of the OIV prize for the best new book in the economy category.
The University of Western Australia